Vietnam to review Uber, Grab legal status

Transport regulations will be reviewed to ensure a fair business environment for firms, Deputy Minister of Transport Le Dinh Tho said at a recent conference to review a two-year pilot project of applying technology in passenger transport, including car and motorbike hailing services, such as Uber and Grab.

Tho said rapid technology development was posing challenges to State management agencies due to confusion in defining whether Uber and Grab were technology platforms connecting passengers with drivers or transportation companies.

Many other countries are facing similar battles.

Photo: techcrunch.com

Tho admitted that many rules were now no longer appropriate, creating an unfair environment between traditional taxi firms and new ones like Uber and Grab.

“It is necessary to create a fair and transparent environment for every business,” Tho said, adding that the existing regulations would be reviewed to create business equality.

He said that if necessary, “technology” taxi firms would be required to register legal entities in Vietnam.

The Ministry of Transport also urged traditional taxi firms to promote the application of technology and enhance their services to avoid being left lagging behind.

The Ministry of Finance proposed that the operation of Uber and Grab in Vietnam be clarified to set a base for how they were regulated.

Hoang Thi Ha Giang, Deputy Director of the Tax Policy Department, said clear regulations were needed to efficiently collect taxes from Uber and Grab, which was still a headache.

Traditional taxi firms, who have fallen into difficulties since the rapid expansion of Uber and Grab in Vietnam in recent years, called for equality in management.

Traditional taxi firms said that they were under tighter regulations than Uber and Grab, such as bans on using several streets, paying more tax - and higher operation costs.

Truong Dinh Quy, deputy director of taxi company Vinasun, said that Uber and Grab should be regarded as a transportation company rather than a technology platform.

Sharing the same viewpoint, Vu Van Vien, Director of the Hanoi Department of Transport, said that banning “technology” taxi companies was not an appropriate solution but agreed regulating them could work.

Do Quoc Binh, Chairman of the Hanoi Taxi Association, said that the Uber and Grab boom put significant pressure on the traffic system.

Binh said that tax collections for the two types of business were unfair. He urged the pilot program to be halted.

A report by the Ministry of Transport showed that the pilot programe is now implemented in four provinces and cities, namely Hanoi, Quang Ninh, Khanh Hoa and Ho Chi Minh City. This involved 866 transport companies with a total of more than 36,800 vehicles.